Abstract
Abstract Diminishing quantities of appearance grade lumber and rising price premiums for it have accompanied the transition from old-growth to young-growth timber. The price premiums for better grades are an incentive for producers to undertake investments to increase the yield of those higher valued products. Price premiums, however, are also an incentive for users to substitute lower grades, lower priced species, or nonwood materials for these higher priced appearance grades. This possibility may cast doubt on the permanence of the price premiums associated with appearance grade lumber. The real price premiums paid for appearance grades of lumber from January 1989 through October 1995 were substantial and quite stable during a widely fluctuating softwood lumber market. We found little or no evidence to suggest that these premiums are either "temporary" or are in decline. Although care is required in extrapolating these findings over future long time horizons typically required for silvicultural investments in wood quality changes, the results of this study may help forest managers better understand the possible magnitude of real price premiums to use in evaluating those investments. West. J. Appl. For. 14(2):73-79.
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